Taking note of the developmental nature of the project and its relevance to the Indian scenario of secondary steel making route, the UNDP and UNIDO came forward to provide substantial assistance in the establishment of the plant. Implementation of the project to setup the demonstration sponge iron plant at Paloncha near Kothagudem in Andhra Pradesh was entrusted to the Sponge Iron India Limited (SIIL) an enterprise of the Government of India and the Government of Andhra Pradesh. Construction of the plant, with the capacity of 100 Tonnes per day and based on the rotary kiln process started in July, 1978. The well equipped laboratory and other support facilities were established with UNIDO's assistance ahead of the construction of the plant enabling the essential laboratory work on Indian Ores and Coals to be carried out even before commissioning of the plant. The plant went into regular operation in November, 1980 after which efforts were directed at operating the plant with different combinations of ores using coal from local 'Singareni' mines as reductant, adjusting the process parameters to local conditions and effecting modifications to the plant to achieve a high degree of capacity utilization. As a result of all these measures and the care given in the training of operating personnel, it has been possible to achieve over 90% capacity utilization in the very first full year of operation. Another significant development has been to maintain the operation of the plant on 100% coal and achieve long campaign lives. Unlike a commercial plant,  which is normally designed for using one combination of Iron ore and coal, the Paloncha plant of Sponge Iron India Limited has the unique capability and flexibility for using different combinations of ores and coals. Taking note of its exclusive facilities under one roof UNIDO recognized as SIIL as a premier consultant in the field of coal based Sponge Iron Technology. Having achieved its primary goal of producing quality sponge iron from lump iron ore and low grade non-coking coal and establishing a country wide market for its product, the Company felt it necessary to develop indigenous capability for design engineering and manufacture of equipment for Sponge Iron Plant. Accordingly, the Company took on the work of setting up second unit of 100 TPD capacity at the same location. Construction of this second unit was completed in a record time and was commissioned in October, 1985. A significant achievement in setting up the expansion unit is that the plant was designed and built with total in house engineering expertise. The new unit started operating at the rated capacity with in a few days of its start up and continues to maintain high levels of productivity.

In the rotary kiln considerable quantity of fines in the product between 3 and 5 mm in size are generated which cannot be directly used in electric arc furnaces, because they tend to get blown away while charging into the furnace. To overcome this problem and to utilize this hitherto considered waste material, the Company engineered and build a cold briquetting unit, the first of its kind in the country, for production of high density Sponge Iron briquettes with improved carbon content a product ideally suited as feed stock for electric arc furnace. Nearly 40% of heat energy is lost through waste gases going up the stack in the rotary kiln process. Harnessing this wasted energy could result in generating enough electric power to fully meet the requirements of both the Sponge Iron units, through out the year. A project costing 92 million Rupees was conceived and put into action. Utilizing about 50,000 normally metric cubic meters of waste gas from both the rotary kilns, two waste heat boilers generates sufficient super heat steam at temperature of 400 degrees Celsius to generate about 4 to 5 MW of electric power. The total power requirement of both the Sponge Iron units being around 2 MW, nearly 3 MW of access power is available from the captive power plant, which uses the otherwise wasted heat energy from the kilns. Moreover the cost of this internally generated power works out to nearly 1 1/2 of the price of power obtained from the local electricity grid. In generating this wealth from waste, Sponge Iron India Limited has broken new grounds, in drastically improving the thermal efficiency of the rotary kiln process. 

In India, non coking based DRI has been a timely technology in establishing   a viable and cost effecting new role in steel making. A note worthy feature of the technology developed by SIIL in his attainment of long campaign lives even with the use of high ash coals upto 40%. The decade of 80s has been a period exiting experience for Sponge Iron India, investigating, experimenting, modifying, innovating and updating Sponge Iron Technology in India. The singular achievement of Sponge Iron India has been the prime source of inspiration for many a Sponge Iron Plants to sprout at many locations in the country. Of these, as many as five new plants were set up with total Consultancy support from SIIL. One of these, a 30,000 TPY plant, is designed to operate with Lignite as reductant. SIIL has also undertaken semi-commercial scale test campaigns for the reduction of Limenite. SIIL has developed the technology and designs for setting up coal based Sponge Iron units in wide range of modules upto 150,000 Tonnes per annum. 

On behalf of UNIDO, Sponge Iron India successfully completed large number of test work assignments on raw materials drawn from a number of countries like Niger, Zambia, Pakistan, Egypt, Nepal and Vietnam. The experience gained in designing and building, as well as operating Sponge Iron Plants and the availability of one of the best equipped metallurgical test centres, have made SIIL a unique consultant in the field coal based Direct Reduction Technology. Comprehensive consultancy work for the conversion of a cement kiln to produce Sponge Iron in Vietnam was one of the prestigious assignments undertaken by SIIL. The work included engineering design supply of equipment from India, supervision of construction, start up and stabilization of production and performance guarantees. Sponge Iron India has also provided comprehensive training in a wide variety disciplines to four batches of operating and maintenance personnel of Vietnamese plant. Yet another assignment of similar nature is under way, half way around the globe, in Peru, South America where SIIL is providing comprehensive consultancy services to a Peruvian Steel Company. 

Since the commissioning of the first Sponge Iron unit in 1980, it has been a period of notable accomplishments for Sponge Iron India Limited which has played vital role in developing and establishing coal based DR Technology. Establishment and upgradation of coal based Sponge Iron technology in the Country, innovations in the usage of Sponge Iron and its conversion into Steel, conversion of waste material into value added products, visualization of new concepts for updating technology and the unique expertise in total consultancy for establishing new Sponge Iron plants have all contributed to the evolution of Sponge Iron India into a 'Technology Corporation'.
 
 

With its rich experience in designing and establishing a number of sponge iron plants based on variety of raw material combinations, both within the Country and abroad, Sponge Iron India is in an exclusive position to render the complete range of engineering and consultancy services for coal based sponge iron plants. 
The spectrum of SIIL services include:
a) Comprehensive testing of raw materials for the process.
b) Preparation of project report for an investment decision.
c) Basic and detailed engineering of the reduction unit and all the auxiliaries from raw material preparation to storage and handling of finished products.
d) Preparation and selection of mechanical, electrical and instrumentation equipment including refractories.
e) Inspection of equipment to ensure compliance of specifications and for meeting the required standard from operational point of view.
f) Assistance in supervision of erection, start-up and commissioning.
g) Scheduling and monitoring the implementation of project with assistance in trouble shooting during erection and commissioning.
h) Assistance in commissioning the plant and optimizing the plant operations.
i) Full performance guarantees for achieving rated capacity utilization.

World wide, recent trends in Steel have realized the growing potential in the Secondary route- Electric Steel making. With reduced availability of scrap and the limited scope for further growth in HBI, the only answer for providing 'Metallics' to this growing sector lies in coal based DRI. And when it comes to coal based DRI, Sponge Iron India Limited, the 'Technology Corporation', can provide cost effective solution.